CAMBRIDGE GEOGRAPHY A2 - FREE TRADE ZONES AND EXPORT PROCESSING ZONES.

1. A2 GEOGRAPHY
PRODUCTION, LOCATION AND CHANGE
MANUFACTURING AND RELATED SERVICE INDUSTRY
FREE TRADE ZONES AND
EXPORT PROCESSING ZONES

2. WHAT IS AN EXPORT PROCESSING ZONE?
An export processing zone (EPZ) is a type of free trade zone (FTZ), set
up generally in developing countries by their governments to promote
industrial and commercial exports.
In addition to providing the benefits of a EPZ, these zones offer other
incentives such as exemptions from certain taxes and business
regulations.
They are also called development economic zone or special economic
zone.
OTHER DEFINITION: An Export Processing Zone (EPZ) is a Customs area where
one is allowed to import plant, machinery, equipment and material for the
manufacture of export goods under security, without payment of duty.

4. BUSINESS RESEARCH ON EPZ
Export processing zones (EPZs) are areas within developing countries
that offer incentives and a barrier-free environment to promote
economic growth by attracting foreign investment for export-oriented
production.
The number of zones internationally, countries hosting EPZs, and firms
operating in them, and the business volume they handle, are all
growing rapidly, suggesting their importance.
Yet, business research on EPZs is virtually non existent, leading to poor
understanding of their role in international marketing.

5. THE FIRST FREE TRADE ZONE
The world's first Free Trade Zone was established in Shannon, Ireland
(Shannon Free Zone).
This was an attempt by the Irish Government to promote employment
within a rural area, make use of a small regional airport and generate
revenue for the Irish economy.
It was hugely successful, and is still in operation today.
The number of worldwide free-trade zones proliferated in the late 20th
century.
In the United States free-trade zones were first authorized in 1934.

6. THE SETTING UP OF THE TRADE ZONE
Corporations setting up in a zone may be given tax breaks as an
incentive.
Usually, these zones are set up in underdeveloped parts of the host
country; the rationale is that the zones will attract employers and thus
reduce poverty and unemployment, and stimulate the area's
economy.
These zones are often used by multinational corporations to set up
factories to produce goods (such as clothing or shoes).

7. SPECIAL ECONOMIC ZONE
Free Trade Zones are also known as Special Economic Zones in some
countries.
Special Economic Zones (SEZs) have been established in many
countries as testing grounds for the implementation of liberal market
economy principles.
SEZs are viewed as instruments to enhance the acceptability and the
credibility of the transformation policies and to attract domestic and
foreign investment.

8. OBJECTIVES
In 1999, there were 43 million people working in about 3000 FTZs
spanning 116 countries producing clothes, shoes, sneakers,
electronics, and toys.
The basic objectives of EPZs are to enhance foreign exchange earnings,
develop export-oriented industries and to generate employment
opportunities.